5 Common Fraud Types that a Professional E-Commerce Fraud Protection Tool Can Prevent?

 elieve and what to ignore may be difficult at times, particularly in the digital world. This is due to the fact that individuals' sensitive information, including contact data or credit card numbers, may be obtained via various deceptive means. The number of people falling prey to more complex internet fraud schemes is, hence, constantly increasing.

Thus, online stores must use robust security measures, such as professional e-commerce fraud software, to protect consumer data during financial transactions. The loss of trust from customers and harm to their hard-earned reputations are only two of the many serious outcomes that may result from inadequate protection. This is why robust e-commerce fraud protection solutions should be a top priority for all online enterprises.

In order to succeed without losing essential data, every company should know how to prevent and identify fraud and which are the most common types of fraud used on online platforms.

1.    Get a Good E-Commerce Fraud Protection Tools to Avoid Credit Card Fraud

This is the most prevalent sort of online shopping fraud that a professional e-commerce fraud protection system can prevent. This type of fraud is committed mainly by inexperienced con artists who believe that scamming people is the easiest way to achieve happiness.

This kind of attack involves the fraudster buying stolen credit card details from the dark web or getting their hands on someone else's card and making a note of the details. Then, they use those details to buy something from an online store.

The con artist may utilize residential proxies and other methods to conceal their identity while they recover the products (for example, sending them to reshippers).

2.    Chargeback Fraud Can Be Prevented by Getting a Professional E-Commerce Fraud Software

The criminal commits chargeback fraud when they make a purchase from an online retailer and then ask for a refund after the product has been sent. When this happens, the "customer" (the fraudster) will get a refund from the acquirer's credit card network, but the merchant will still have to pay the same amount to the bank or network. This can be avoided if you do vigorous research and decide to get proficient e-commerce fraud software.

A perpetrator of chargeback fraud will pose as a legitimate business and contest legitimate claims. For instance, they can claim the item never came or inform the processor that they sent it back to the store (which they never really did).

"Friendly fraud" is another name for chargeback fraud because of the claims themselves. It might be challenging to identify chargeback fraud since it can be undertaken by someone who has the legal right to use their credit card.

3.    The Triangulation Scam

The perpetrator of triangulation fraud will enlist the help of a third-party shopper in order to initiate the assault. The online retailer, the customer, and the fraudster are the three main actors in this assault.

Setting up an online shop on a platform like Shopify or an e-commerce site like Amazon or Etsy is the first step for a fraudster to execute a triangulation scam. Selling popular items at rock-bottom prices is a typical strategy for making a fast buck, which can be avoided the moment you get a professional e-commerce fraud protection tool.

However, the fraudster will steal the credit card details of an actual consumer and use them to buy the same things from another genuine online retailer when the actual customer makes a transaction.

Although the recipients of the items may believe they have saved money, their credit card details have been obtained, and they will really have to pay the total price.

4.    Refund Fraud

In cases when the fraudster is unable to get their ordered products or access the funds on a stolen credit card, they may resort to refund fraud.

The perpetrator of refund fraud makes an online purchase using stolen credit card information and then approaches the online retailer to ask for a refund. This scam will immediately be detected if your company uses an e-commerce fraud software that can identify any fraud attention in no time.

An example of a typical refund fraud scheme would be for the perpetrator to purposefully pay more than what is due and then ask for the difference to be refunded using a different means of payment (for instance, by saying the credit card was closed). By doing so, the fraudster may keep the "excess" money instead of having the initial credit card charge reimbursed; this avoids the risk of a chargeback should the card's owner dispute the transaction.

If you are a small business and you feel overwhelmed about the dangers of fraud, choosing the right e-commerce fraud protection tool can save your company time and resources. You will be in control of all of your company's transactions, and you will be more at ease regarding managing fraud attempts.

5.    The Interception Scam

When scammers use a legitimate card's associated billing and delivery addresses to make purchases from an online shop, they are committing interception fraud, which can be easily managed and identified by using competent e-commerce fraud software. Yet, the con artist proceeds to try to steal your possessions.

Among the many methods used by attackers to commit interception fraud, the following stand out:

• By presenting what appears to be valid reasons to an online retailer's customer care department, they manage to have the address changed just before shipping.
• Holding out for the shipment to come and trying to physically seize it (for instance, if the con artist lives in close proximity to the legitimate cardholder).
• Getting in touch with the courier to change the delivery address.

Final Thoughts

The best way to safeguard your online storefront against fraudulent transactions is to install a powerful e-commerce fraud protection system that can spot warning signs and deny access to anyone who may be trying to commit fraud.

When users exhibit suspicious activity on your online platform or phone app, the e-commerce fraud software's powerful bot detection capabilities will immediately flag the situation. By proactively blocking the source before assaults even begin, a professional tool can successfully prevent fraud without affecting the consumer experience adversely.